Monday, June 14, 2010
‘A Very Deep Hole’
By BOB HERBERT
New York Times
June 7, 2010
I know the president has a lot on his mind, but the No. 1 problem facing the U.S. continues to fester, and that problem is unemployment.
The jobs report for May, released on Friday by the Labor Department, was grim. President Obama tried to put the best face on it, but it was undeniably bad news, which is why the stock markets tanked. The private sector created just 41,000 jobs in May, a dismal performance. The government hired 411,000 workers to help with the census, but those jobs are temporary and will vanish in a few months.
Unemployment is crushing families and stifling the prospects of young people. Given that reality, President Obama’s take on the May numbers seemed oddly out of touch. “This report,” he said, “is a sign that our economy is getting stronger by the day.”
The economy is sick, and all efforts to revive it that do not directly confront the staggering levels of joblessness are doomed. Even the meager job growth in the private sector last month was composed mostly of temporary work. Lawrence Mishel, the president of the Economic Policy Institute, had the right take when he said, “These new data do not present a picture of a healthy private sector and offer nothing even closely resembling the job growth we need to dig us out of a very deep hole.”
More than 15 million Americans are out of work, and nearly half have been jobless for six months or longer. New college graduates are having a terrible time finding work, and many are taking jobs that require only a high school education. Teachers are facing the worst employment market since the Depression.
Entire communities are going under. A remarkable article in The Times last week detailed what has happened in Memphis, where a majority of the residents are black. It said the city epitomizes “how rising unemployment and growing foreclosures in the recession have combined to destroy black wealth and income and erase two decades of slow progress.”
The median income of black homeowners in Memphis has dropped to a level below that of 1990.
It’s impossible to overstate the threat that this crisis of unemployment poses to the well-being of the United States. With so many people out of work and so much of the rest of the population deeply in debt, where is the spending going to come from to power a true economic recovery? The deficit hawks are forecasting Armageddon, but how is anyone going to get a handle on the federal deficits if we don’t get millions of people back to work and paying taxes?
Some inner-city neighborhoods, where joblessness is off the charts, are becoming islands of despair. Rural communities and rust belt cities and towns are experiencing their own economic nightmares.
There is no plan that I can see to get us out of this fix. Drastic cuts in government spending would only compound the crisis. State and local governments, for example, are shedding workers as we speak.
Policy makers have acted as if they are unaware of the magnitude of this crisis. They have behaved as though somehow, through some economic magic perhaps, or the power of prayer, this ocean of joblessness will just disappear. That’s a pipe dream.
Even if we somehow experienced a sudden, extraordinary surge in job growth (which no one is expecting), it would take a very long time just to get back to the level of employment that we had when the recession started in late-2007.
Heidi Shierholz, an economist with the Economic Policy Institute, addressed this. “In the boom of the late-1990s,” she said, “the fastest year of employment growth was 2.6 percent, in 1998. If, in the event we have that extremely strong level of growth from here on out, we would still not get down to pre-recession unemployment rates until January 2015.”
For all the money that has been spent so far, the Obama administration and Congress have not made the kinds of investments that would put large numbers of Americans back to work and lead to robust economic growth. What is needed are the same things that have been needed all along: a vast program of infrastructure repair and renewal; an enormous national investment in clean energy aimed at transforming the way we develop and use energy in this country; and a transformation of the public schools to guarantee every child a first-rate education in a first-rate facility.
This would be a staggeringly expensive and difficult undertaking and would entail a great deal of shared sacrifice. (It would also require an end to our insane waste of resources on mindless and endless warfare.) The benefits over the long term would be enormous.
Bold and effective leadership would have put us on this road to a sustainable future. Instead, we’re approaching a dead end.
Posted by tha artivist at 8:20 PM